USE THE FOLLOWING DATA TO ANSWER THE QUESTION
John and Anne have the following expenses and account balances:
|
John’s annual 401(k) contribution |
$22,000 |
|
John’s annual salary |
$165,000 |
|
Current Liabilities |
$36,000 |
|
Housing Costs (PITI) monthly |
$3,450 |
|
Cash & Cash Equivalents |
$60,000 |
|
Monthly non-discretionary cash flows |
$7,500 |
|
Monthly debt payments other than housing |
$1,000 |
|
* John’s employer matches $1 for $1 up to 5% of his salary in his 401(k) plan. |
|
Based on the information above, calculate the Housing Ratio 2.
|
32.36% |
||
|
30.20% |
||
|
28.36% |
||
|
34.75% |
Answer is 80% and working as follow
| 1 | Jhons Annual Salary | 1,65,000.00 | |
| Jhons House Hold Expenses Annual | |||
| Housing Costs (PITI) monthly | 41,400.00 | ||
| Monthly non-discretionary cash flows | 90,000.00 | ||
| 2 | Total Housing Cost | 1,31,400.00 | |
| Housing Ratio = 2/1*100 | 80% |
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